COMMONWEALTH OF MASSACHUSETTS
APPELLATE TAX BOARD
PETER A. BAILEY, et al.,v. BOARD OF ASSESSORS OF
TRUSTEES OF THE COUNTRY THE CITY OF TAUNTON
HILLS 3 REAL ESTATE TRUST
Docket Nos. F315092-F315101Promulgated:
September 20, 2013
These are appeals filed under the formal procedure, pursuant to G.L. c. 58A, § 7 and G.L. c. 59, §§ 64 and 65, fromthe refusal of the Board of Assessors of the City of Taunton (“appellee” or“assessors”) to abate taxes on certain real estate in Taunton owned by and assessed to the Country Hills 3Realty Trust, Peter A. Bailey, Trustee (“appellant”)under G.L.c. 59, §§ 11 and 38,for fiscal year 2012 (“fiscalyearatissue”).
Commissioner Chmielinski heard these appeals. Chairman Hammond, Commissioners Scharaffa and Rose, and former Commissioner Mulhern joined him in the decisions for the appellee.
These findings of fact and report are made pursuant to a request by the appellant under G.L. c. 58A, § 13 and 831 CMR 1.32.
Peter A. Bailey and William R. Haney, pro se, for the appellant.
Katherine Grein, assessor, for the appellee.
FINDINGS OF FACT AND REPORT
On the basis of the testimony and exhibits entered into the record, the Appellate Tax Board (“Board”) made the following findings of fact.
At issue in these appeals are the fair cash values of ten condominium units (“subject condos”) located at 600 County Street in Taunton. The subject condos are part of Country Hills Estates, which is a 32-unit condominium complex built in 1988. Country Hills Estates is comprised of four wood-frame buildings which are surrounded by paved, uncovered parking areas. There are 17 two-bedroom, two-and-a-half bathroom condo units; 12 two-bedroom, one-and-a-half bathroom condo units; two one-bedroom, one-and-a-half bathroom condo units; and one three- bedroom, two-and-a-half bathroom condo unit.
Most of the subject condos are two stories, and they range in size from 802 to 1,356 square feet in finished living area. The subject condos each feature a fireplace, a deck, and a porch. The assessors considered the subject condos to be in average condition for the fiscal year at issue. More detailed information about each of the subject condos, including their assessed values as of January 1, 2011, the relevant date of valuation in these appeals, is set forth in the following table.
Unit No. / Size (sf) / Beds/Baths / AssessedValue ($) / Total Tax at
$12.47/$1,000 ($)
202 / 802 / 1/1 / 124,900 / 1,557.50
305 / 1,356 / 2/2 / 183,300 / 2,285.75
402 / 802 / 1/1 / 124,700 / 1,555.01
406 / 1,223 / 2/2 / 171,900 / 2,143.59
501 / 1,034 / 2/1.5 / 163,800 / 2,042.59
503 / 1,034 / 2/1.5 / 163,800 / 2,042.59
505 / 1,356 / 2/2 / 183,300 / 2,285.75
506 / 1,223 / 2/2 / 171,900 / 2,143.59
507 / 1,356 / 2/2 / 183,300 / 2,285.75
508 / 1,223 / 2/2 / 171,900 / 2,143.59
On December 29, 2011, the Tax Collector for the City of Taunton mailed the fiscal year 2012 actual real estate tax bills for the subject condos. The appellant timely paid all of the taxes due, without incurring interest. On January 27, 2012, the appellant filed Applications for Abatement with the assessors, seeking abatements of the taxes assessed upon the subject condos. The assessors voted to deny the appellant’s requests for abatement on February 9, 2012, and sent notices of their denials to the appellant on that same date. The appellant timely filed its appeals with the Board on April 10, 2012. Based on the foregoing facts, the Board found that it had jurisdiction to hear and decide these appeals.
The Appellant’s Valuation Evidence
The appellant presented its case-in-chief through the testimony of Peter A. Bailey and William R. Haney, who are trustees of the Country Hills 3 Real Estate Trust and the owners of the subject condos, as well as the presentation of a documentary submission which was marked as exhibit one and entitled “Broker Price Opinion for CY2011” (“Broker Price Opinion”).It was prepared by two brokers from an entity called Group Boston Real Estate, though neither of the brokers testified at the hearing of this appeal. The Broker Price Opinion containeda market analysis of 24 condominium units in Taunton which sold between January 28, 2011 and December 21, 2011. Among the 24 condominium units were three units located at Country Hills Estates, including one of the subject condos- unit 505.[1] Information about each of the 24 condominiums, in the form of property descriptions from the Multiple Listing Service (“MLS”), a widely used application in real estate, was also contained within the Broker Price Opinion.
According to the MLS property descriptions, the 24 condominiums ranged from 1,000 to 1,374 square feet in finished living area, and they sold for prices ranging from $67,500 to $134,000. According to the “market data summary” contained within the Broker Price Opinion, the average per-square-foot sale price of the 24 condominiums was $93.00, and it was the brokers’ opinion that the subject condos would have sold for that amount on January 1, 2011. Applying that per-square-foot value to each of the subject condos, the brokers’ opinions of market value were:
Unit No. / Size (sf) / Value at $93.00/sf202 / 802 / 74,586
305 / 1,356 / 126,108
402 / 802 / 74,586
406 / 1,223 / 113,739
501 / 1,034 / 96,162
503 / 1,034 / 96,162
505 / 1,356 / 126,108
506 / 1,223 / 113,739
507 / 1,356 / 126,108
508 / 1,223 / 113,739
In addition to the evidence contained in the Broker Price Opinion, the appellant emphasized the declining real estate market in Taunton. To illustrate this fact, the appellant pointed to the sale of one of the condominiums located in Country Hills Estates that was not at issue in these appeals, Unit 403. Unit 403 was sold in a foreclosure sale on April 29, 2010 for $110,000, or $106.38 per square foot, while it was assessed at $150.00 per square foot. This evidence, the appellant argued, demonstrated that the assessed values of the subject condos exceeded their fair cash values. In closing, the appellant asserted that the fair cash values of the subject condos were those suggested in the Broker Price Opinion, which reflected values of $93.00 per square foot.
The Assessors’ Valuation Evidence
Katherine Grein, Chief Assessor for the City of Taunton and an MAI-certified real estate appraiser, testified on behalf of the assessors, and the Board found her testimony to be credible. The assessors also entered into the record numerous documentary submissions, such as relevant jurisdictional documents and property record cards for each of the subject condos. Among the documents offered by the assessors was exhibit C, which contained a comparative sales analysis of seven condominiums located in Taunton, as well as the property record cards and sales deeds for each of the seven condominiums.
The seven condominiums selected by the assessors for comparison ranged in size from 800 to 1,520 square feet in living area. They were all sold during 2010 in arm’s-length transactions, as evidenced by the sales deeds, and their sale prices ranged from $134,900 to $250,000. Ms. Grein suggested that these sales provided ample support for the assessments at issue, which ranged from $124,700 to $183,300.
Ms. Grein also testified that there was a decline in the condominium market in Taunton of approximately six percent between 2010 and 2011. Accordingly, it was her opinion that 2010 sales provided a more reliable indication of the fair market values of the subject condos on January 1, 2011 than sales which occurred during 2011.
In addition, Ms. Grein stated that in 2011, there were a total of 82 condominium sales in Taunton, 57 of which were not arm’s-length transactions, e.g., short sales, foreclosure sales, and the like. Three of the recent sales of condominiums located at Country Hills Estates were foreclosure sales, including two that occurred in 2010 and one that occurred in 2011. For this reason, Ms. Grein opined that the sales of condominiums located at Country Hills Estates that were entered into the record did not provide a reliable indication of the fair market value of the subject condos.
In addition to this valuation evidence, Ms. Grein noted that of the 24 sales contained in the Broker Price Opinion offered by the appellant, 16 were sales of bank-owned properties, short sales, or foreclosure sales, and her assertion was corroborated by the documents contained within the Broker Price Opinion. Further, Ms. Grein stated that the MLS property descriptions offered by the appellant contained inaccuracies. Specifically, based on a comparison of information contained on sales deeds and property record cards, Ms. Grein pointed out that the MLS property descriptions for at least two of the eight “qualified” sales offered by the appellant contained incorrect information regarding size and date of sale. Ms. Grein asserted that these deficiencies in the appellant’s evidence detracted from the reliability of the appellant’s opinions of fair cash value.
In closing, Ms. Grein asserted that the seven sales selected by the assessors, each of which occurred in 2010 and were made at arm’s length, provided the most reliable indication of the fair cash values of the subject condos on January 1, 2011. She further asserted that the sale prices of those seven condominiums, which ranged from $134,900 to $250,000, provided ample support for the assessments at issue, which ranged from $124,700 to $183,300.
The Board’s Valuation Findings
On the basis of all of the evidence, the Board found that the appellant failed to meet its burden of proving that the assessed values of the subject condos exceeded their fair cash values for the fiscal year at issue. The evidence presented by the appellant was wanting in several respects, and, as a whole, did nothing to undercut the presumptive validity of the assessments at issue.
First, the Board found that the Broker Price Opinionwas hearsay, as the brokers who prepared the report were not present to testify at the hearing of this appeal. Further, the report was premised on information obtained from MLS, and that information was not corroborated by supporting documents, such as sales deeds or property record cards. In addition, as was demonstrated by Ms. Grein, the information contained within the MLS property descriptions contained inaccuracies. For these reasons, the Board found that the Broker Price Opinion did not provide a reliable indication of the fair cash values of the subject condos.
Second, each of the 24 condominium sales featured in the Broker Price Opinion occurred in 2011. Based on Ms. Grein’s credible testimony, the Board found that the market for condominiums in Taunton was in decline during 2011. The Board therefore concluded that sales that occurred during 2010 provided a more reliable indication of the fair cash values of the subject condos on January 1, 2011, the relevant date of assessment, than sales which occurred during 2011. Accordingly, the Board placed little weight on the appellant’s opinions of value, as they were premised entirely on sales which occurred during 2011.
Third, and most importantly, of the 24 sales that formed the basis of the appellant’s proposed fair cash values, 16 were short sales, foreclosure sales, or sales of bank-owned properties. It is axiomatic that fair cash value is the amount upon which a willing seller and a willing buyer in a free and open market will agree if both of them are fully informed and under no compulsion. Short sales, foreclosure sales, and sales of bank-owned properties are strongly suggestive of compulsion to sell, and the appellant offered no evidence to rebut that suggestion. The Board therefore declined to place weight on the appellant’s opinions of value, as they were based primarily on sales that were not made at arm’s-length.
In contrast, the assessors presented seven sales of condominiums located in Taunton, each of which were sold in arm’s-length transactions during 2010, for prices ranging from $134,900 to $250,000. The Board found that this evidence provided additional support for the assessments at issue, which ranged from $124,700 to $183,300. The Board therefore gave weight to this evidence, which, when coupled with the presumptive validity of the assessments and the relative weakness of the appellant’s evidence, compelled the Board to conclude that the appellant had not met its burden of proving that the assessed values of the subject condos exceeded their fair cash values for the fiscal years at issue. Accordingly, the Board issued decisions for the appellee in these appeals.
OPINION
The assessors are required to assess real estate at its fair cash value determined as of the first day of January preceding the fiscal year at issue. G.L. c. 59, §§ 2A and 38. Fair cash value is defined as the price on which a willing seller and a willing buyer in a free and open market will agree if both are fully informed and under no compulsion. Boston Gas Co. v. Assessors of Boston, 334Mass. 549, 566 (1956).
The appellant has the burden of proving that the subject property has a lower value than that assessed. “‘The burden of proof is upon the petitioner to make out its right as [a] matter of law to [an] abatement of the tax.’” Schlaiker v. Assessors of Great Barrington, 365Mass. 243, 245 (1974) (quoting Judson Freight Forwarding Co. v Commonwealth, 242 Mass. 47, 55 (1922)). “[T]he board is entitled to ‘presume that the valuation made by the assessors [is] valid unless the taxpayers . . . prov[e] the contrary.’” General Electric Co. v. Assessors of Lynn, 393Mass. at 591, 598 (1984) (quoting Schlaiker, 365 Mass. at 245).
The fair cash value of property may be determined by recent sales of comparable properties in the market, as actual sales generally “furnish strong evidence of market value, provided they are arm’s-length transactions and thus fairly represent what a buyer has been willing to pay for the property to a willing seller.” Foxboro Associates v. Assessors of Foxborough, 385Mass. 679, 682 (1982); New Boston Garden Corp. v. Assessors of Boston, 383 Mass. 456, 469 (1981); First National Stores, Inc. v. Assessors of Somerville, 358 Mass. 554, 560 (1971).
In the present appeals, the appellant’s opinions of fair cash value were primarily based on the information contained in the Broker Price Opinion. The Board found and ruled, however, that that evidence was neither persuasive nor reliable for numerous reasons, including that it was hearsay and was based on inaccurate information, and more notably because it relied heavily on sales that were not made at arm’s-length.
Evidence of sales is persuasive “only if [the sales]are free and not under compulsion.” Congregation of the Mission of St. Vincent dePaul v. Commonwealth, 336 Mass. 357, 360 (1957). The burden of proof that the price was fixed fairly rests with the proponent of the sale. See Epstein v. Boston Housing Authority, 317Mass. 297, 300-01 (1944). Short sales, foreclosure sales, and sales of bank-owned properties “inherently suggest[] a compulsion to sell; a proponent of evidence of such sale[s] must show circumstances rebutting the suggestion of compulsion.” DSM Realty, Inc. v. Assessors of Andover, 391Mass. 1014 (1984)(rescript opinion); see alsoG.F.Springfield Management v. Assessors of West Springfield, Mass. ATB Findings of Facts and Reports 2000-228, 242, 251 (additional citations omitted). In the present appeals, two-thirds of the sales offered by the appellant were bank-owned properties, short sales, or foreclosure sales, and the appellant presented no evidence to rebut the suggestion of compulsion with respect to those sales. Accordingly, the Board found that their persuasive value was greatly diminished.
Similarly, the Board found that the appellant’s estimates of the subject condos’ fair market values were likely understated because they were premised exclusively on sales that occurred during 2011, when the market for condominiums in Taunton was in decline.
In contrast, the valuation evidence presented by the assessors suffered from none of these infirmities. That evidence included sales data from seven condominiums in Taunton that were sold in arm’s-length transactions during 2010. The Board found and ruled that the assessors’ valuation evidence provided additional support for the assessments at issue, which were, of course, presumptively valid. SeeGeneral Electric Co., 393Mass. at 598.
Accordingly, on the basis of all of the evidence, the Board found and ruled that the appellant failed to meet its burden of establishing that the assessed values of the subject condos exceeded their fair cash values for the fiscal year at issue. The Board therefore issued decisions for the appellee in these appeals.
THE APPELLATE TAX BOARD
By:______
Thomas W. Hammond, Jr., Chairman
A true copy,
Attest:______
Clerk of the Board
ATB 2013-1
[1] Unit 505 was not owned by the appellant on January 1, 2011, the relevant date of valuation. The appellant purchased that unit, which had been owned by Lana J. and Theodore Alexander, on August 17, 2011. However, the Board found that the appellant had standing to bring that appeal as a subsequent owner of the property, pursuant to G.L. c. 59, § 59.